Our mission is to provide our customers with high-quality telecommunications services at competitive prices. Specific components of our strategy include the following:
- Continue to leverage our advanced fixed fiber network, offering high-quality service while maintaining competitive prices.
- Expand our mobile telecommunications network in our core geographic segments and grow our mobile communication services business line.
- Focus on core Romanian and Hungarian markets and expand market share.
- Grow the number of customers through product cross-selling and increased penetration of our services, while managing customer churn. We may also seek to grow through opportunistic acquisitions.
We consider our key strengths to include the following:
- Attractive local markets with stable structural growth.
- Market leadership in core business lines and robust growth of customers’ number.
- Advanced infrastructure, including nationwide fiber networks in Romania and Hungary and the fastest growing, in terms of customers, mobile network in Romania.
- Leading commercial proposition for customers.
- Robust financial performance.
- Highly experienced management team.
Cable TV Services
Our cable TV business was founded in 1992 by a group of Romanian individuals, including Mr. Zoltan Teszari. They founded the company TVS Holding Brasov and started to build cable networks and offer cable TV services in Timisoara and Brasov, two of Romania’s main cities.
In 1993, Mr. Zoltan Teszari (co)founded the company Kappa, which built and operated one of the most important and modern cable TV networks in Bucharest at that time.
In 1996, the shareholders of Kappa split the company’s network from Bucharest into two equal parts. Mr. Teszari desired the expansion of operations throughout the country, while the other shareholders wished to limit Kappa’s network coverage to the city of Bucharest. After the split, Mr. Teszari contributed his half of the original Kappa network and all of his interests in the company into a merger process with the company Analog CATV, another important cable operator in Bucharest, which changed its name to Romania Cable Systems S.A. in 1997. Since 1996, we have invested heavily in modernizing existing networks and expanding our coverage through the roll-out of cable networks in underserved areas. We have also acquired numerous fixed internet and data networks in Romania and Hungary.
From 1998 to 1999, Carpathian Cable Investments S.a.R.L. and its affiliates invested approximately $10 million. Later, between 1999 and 2000, Celest Limited and its affiliates invested approximately $6 million. These funds were used for our development needs during that period. In 2005, the company TVS Holding Brasov, which financially and operationally supported our development throughout this period, and functioned as a member of the Group, merged with us. Additionally, in 2005, Romania Cable Systems S.A. merged with Romania Data Systems S.A. (described below) and changed its name to RCS & RDS S.A. Cable Communications Systems N.V., which has changed its name to Digi Communications N.V., was incorporated in 2000 and is currently the controlling shareholder of RCS & RDS.
Diversification and Development
Simultaneously with the rapid development of our cable TV services business, we pursued an ambitious diversification strategy. In 1997, we set up an internet and data subsidiary, Romania Data Systems S.A. Our initial strategy was to target business users with professional internet and data services offered through our fibercoaxial network. In 2001, we began rolling out residential internet services over our cable network, and, by 2002, we had grown to become the leading ISP in Romania in terms of revenue. We started offering limited fixed-line telephony services to business and international customers in 2003, immediately following the liberalization of the Romanian fixed-line telephony market. In 2004, after completing an interconnection agreement with Telekom Romania, we launched mass-market fixed-line telephony services. We merged Romania Data Systems S.A. into Romania Cable Systems S.A. in 2005 and changed the newly-formed company’s name to RCS & RDS S.A. Following the upgrade of much of our cable network to FTTB in 2006, we re-branded our retail internet offering as the FiberLink service. We have completed the upgrade of approximately 84% of our FTTB/FTTH networks in Romania and Hungary to GPON or comparable technology, allowing us to grow organically through increased multiple-play penetration among our customers and cross-selling additional services to our existing customers.
We have pursued an international expansion strategy in parallel with our expansion and diversification within Romania. We began our international expansion at the end of 1998 by commencing operations in Hungary through the acquisition of 15 small to medium networks in Budapest and three other cities in Hungary. Through these acquisitions, we offered services to subscribers in Hungary’s four main cities, with a significant focus on the capital, Budapest. In December 2004, we launched the DTH services in Romania under the brand name “DIGI” and, we also launched the mobile telephony services in Spain (in 2008) and Italy (in 2010), targeting the large Romanian communities in those countries.
Mobile Telecommunication Services
In October 2007, we launched our 3G mobile telecommunication services in Romania during under the brand name DIGI Mobil and gradually expanded the area covered by our services in order to reach more potential subscribers. At December 31, 2016, our 3G and 4G networks covered approximately 98% and respectively 37% of the Romanian population. Since 2008 we have been offering mobile telecommunications services in Spain and, since 2010, in Italy.
Own TV Channels & Radio Stations
Since July 2009, we have offered our own TV channels to our customers and individuals that subscribe to certain other cable operators in Romania and Hungary (from whom we receive fees). Our first such channel was the premium content sports channel, DIGI Sport. Our channel offering now includes sports channels (DIGI Sport1, DIGI Sport 2, DIGI Sport 3 and DIGI Sport 4 (each in Romania) and DIGI Sport 1, DIGI Sport 2 and DIGI Sport 3 (each in Hungary)), a pay TV movie channel (DIGI FILM), a news channel (DIGI 24), documentary channels (DIGI World, DIGI Life and DIGI Animal World) and music channels U Televiziune Interactiva and Hora TV. We also own an interest in Music Channel. At the beginning of February 2014, our news channel (DIGI 24) was declared a “must carry” channel and offered, in addition to our own network, through other cable networks in Romania for free.
Starting from May 2015, we also have been operating radio stations in Romania (Pro FM, Music FM, Dance FM). In November 2015, we launched DIGI FM, a new radio station.
We are a leading provider of telecommunication services in Romania and Hungary. Our offerings in both countries include cable and DTH television services, fixed internet and data and fixed-line telephony. Our fixed telecommunication and entertainment services are offered through our technologically advanced fiber optic network, currently covering approximately 62% and 24% of households in Romania and Hungary, respectively, and both countries are entirely within the footprint of our DTH signal. Our cable and satellite (“direct-to-home”) television subscribers enjoy access to custom-made channels and pay TV services, which carry premium movies and sports content. We also operate one of the most technologically advanced mobile networks in Romania, also having the fastest growing, in terms of customers’ number.
Additionally, to be closer to the large Romanian communities from Spain and Italy, we have provided mobile telecommunications services in such countries.